Jessica Karmasek Apr. 20, 2016, 10:29am


TAMPA (Legal Newsline) - The defendants in a class action lawsuit, brought by a Florida chiropractor against a group of insurers for allegedly breaching a patient’s insurance agreement, recently decided to withdraw their request to separate discovery into two phases.

On April 1, Garrison Property & Casualty Insurance Company, USAA Casualty Insurance Company, USAA General Indemnity Company and United Services Automobile Association filed a notice of withdrawal of their motion to bifurcate.

In their motion, filed in February, the defendants asked a Florida federal court for an order separating discovery into two phases -- one to determine if there was a class to certify and one on the merits of the allegations.

“Limiting discovery to class certification issues until a determination regarding certification is made is necessary to avoid imposing an extraordinary burden and cost on Defendants that will be unnecessary if the Court ultimately denies class certification,” they argued in their Feb. 19 motion.

However, the insurers have decided to withdraw the motion in light of the court’s order last month on their motion to dismiss.

“There is no current need for the Motion given the dismissal of the class allegations,” the defendants wrote in their notice.

After an automobile accident, Allison Consiglio applied for reimbursement of her medical expenses from Garrison, her automobile insurance company.

Citing “Medicare fee schedules,” Garrison, which maintains a large claims handling center in Tampa, reimbursed only a portion of Consiglio’s medical expenses.

Consiglio assigned her claim against Garrison to Todd J. Cielo, a Florida chiropractor, and to his practice, Cielo Sports & Family Chiropractic Centre LLC, both of whom initiated a class action in Florida state court for breach of Consiglio’s insurance agreement.

The plaintiffs argue Garrison can limit reimbursement based on Medicare fee schedules for “personal injury protection” but not for “medical payments.”

The plaintiffs sued the four insurers -- Garrison, USAA, USAA General Indemnity Company and USAA Casualty Insurance Company -- on behalf of those who received from any of the defendants only limited reimbursement for “medical payments” based on “Medicare fee schedules.”

In October, the insurers removed the lawsuit to the U.S. District Court for the Middle District of Florida, Tampa Division, under the Class Action Fairness Act and subsequently moved to dismiss.

At the heart of the case is the plaintiffs’ challenge to Garrison’s use of Florida’s personal injury protection, or PIP, fee schedules to make reimbursement under the MedPay coverage portion of its policies.

The plaintiffs argue Garrison used an undisclosed MedPay reimbursement technology, thus limiting or reducing MedPay reimbursements.

“Plaintiffs allege that the limitation of MedPay reimbursements based on the PIP Medicare Fee Schedule Method violates the terms of Garrison’s insurance policies because the contracts have not clearly and unambiguously adopted the PIP Medicare Fee Schedule Method,” Cielo wrote in a second amended complaint, filed April 13.

“In fact, the policies at issue continue to utilize the same MedPay coverage part language upon which reimbursement had long been made under a previously established methodology including objective data, algorithms and computer calculation methods and was part of a uniform course of dealing between Garrison, USAA Property and Casualty Insurance Group, and Plaintiffs.

“Despite the clear language of its policies, Plaintiffs believe that Garrison has routinely and systematically, since sometime after 2008, utilized the PIP Medicare Fee Schedule Method without clearly and unambiguously adopting the method in its policies.”

The plaintiffs had to amend their original complaint -- filed in Florida’s Thirteenth Judicial Circuit Court in Hillsborough County in August -- for the first time, in December, because counsel used “and” instead of “&” when identifying their plaintiff. In addition, they described Cielo as a “her.”

The federal court, in its March 30 order, instructed the plaintiffs to amend their complaint once again to either remove all the defendants other than Garrison or add a claim against any defendant other than Garrison, and to either remove the class action allegations or remove the claim for damages.

Judge Steven Merryday, in the 10-page order, also granted, in part, the insurers’ motion to dismiss.

“The defendants correctly argue that the plaintiffs fail to establish standing to sue any defendant other than Garrison,” the judge wrote. “Standing requires a showing of an ‘injury-in-fact,’ ‘a causal connection between the injury and the conduct complained of,’ and a ‘likelihood’ ‘that the injury will be redressed by a favorable decision.’

“Although the plaintiffs sue for breach of Consiglio and Garrison’s insurance agreement, the plaintiffs sue -- in addition to Garrison -- the United Services Automobile Association, the USAA General Indemnity Company, and the USAA Casualty Insurance Company. The plaintiffs fail to state any fact establishing an injury suffered by Consiglio and caused by the United Services Automobile Association, the USAA General Indemnity Company, or the USAA Casualty Insurance Company.”

The judge also noted that because the plaintiffs’ claim for damages will require a “significant” number of individualized inquiries, a class action is inappropriate to resolve the claim.

According to an April 8 case management and scheduling order, discovery is due Dec. 12 with a jury trial set for April 2017 before Merryday.

Tampa law firm Harmon Woods Parker & Abrunzo PA is representing the plaintiffs; Akerman LLP, also in Tampa, is representing the defendants.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

Organizations in this Story

Akerman LLP
401 East Jackson Street
Tampa, FL 33602

Harmon Woods Parker & Abrunzo PA
110 North 11th Street
Tampa, FL 33602

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